On July 1, 2016, Allen Company signed a $100,000, one-year, 6 percent note payable. The principal and interest will be paid on June 30, 2017. How much interest expense should be reported on the income statement for the year ended December 31, 2016?

Question

Quizplus · Accepted Answer

The interest expense for the year July 1, 2016, to December 31, 2016, is calculated as follows: 
$100,000 × 6% × 6/12 = $3,000. 
Therefore, the correct answer is B), $3,000.

On July 1, 2016, Allen Company Signed a $100,000, One-Year